Sales growth slows at Safeway

Tuesday 16 April 2002 23:00 BST

SALES growth has slowed at Safeway in recent months, with the revamped supermarket chain lagging its larger rivals. The country's fourth-largest food retailer posted fourth-quarter like-for-like sales of 4.1%. That was in line with the third-quarter showing, but left the full-year growth at 4.9%, from 5.2% the previous year.

Sainsbury's last week said its like-for-like sales climbed 6.8% over the same period, or 4.3% stripping out the effect of an early Easter. Tesco posted its best fourth-quarter results for five years, although that period included Christmas trading.

Safeway said its revamp had dented the performance. Several stores are being converted to hypermarkets and about 25% of the stores have been refurbished, part of the turnaround strategy led by chief executive Carlos Criado-Perez.

'This is a satisfactory performance given the scale of change in stores undergoing reformatting,' Safeway added. The shares tumbled 7 1/4p to 297 3/4p in early trade, just 4p off their year low.

Total sales rose 4.5% for the 12 weeks to 30 March, of which 0.6 percentage points was accounted for by Easter sales. Analysts were expecting Safeway to report like-for-like growth including fuel sales of 3-4%, or 4-5% excluding petrol. The firm did not indicate the contribution of petrol sales.

Safeway is due to report its full-year results on 15 May. Analysts expect pre-tax profits of about £350m, up around 11%.